Failure to extend Brexit talks ‘very risky’, say UK forwarders

UK freight forwarder association BIFA has said that the government’s refusal to extend trade deal talks with the European Union is “very risky” given the coronavirus outbreak.

BIFA said that even before the pandemic, there were concerns among BIFA members that the 11-month transition wouldn’t leave enough time to prepare for a potential no deal, with talks between the UK and the EU only getting back underway this week.

Robert Keen, BIFA director general, said: “In light of the huge issues involved with a sharp change in trading conditions at the start of 2021, particularly if that were to coincide with another Covid-19 outbreak, we think an extension looks increasingly likely.

“There has been little meaningful consultation with UK trade regarding the policies and procedures required in order to ensure that trade with the EU can continue relatively uninterrupted post December 31st 2020. 

“Trade deals are typically multi-year exercises, but in this case, the UK and EU realistically have until October to agree on terms, allowing time for ratification. And while formal talks are continuing, many of the civil service resources previously assigned to support negotiations have been reallocated to deal with the coronavirus emergency response.” 

Keen said that the transition period wasn’t just designed to facilitate negotiations, it was also there to give businesses time to prepare for the future relationship. 

He added that whether or not a free-trade agreement is concluded this year, there will still be major changes to the UK’s trading relationship at the start of 2021, such as new customs documentation and procedures. 

Keen explained: “Having had their businesses knocked sideways by the virus, many of our members have furloughed staff whilst they work out how they can keep their businesses afloat.

“It is unlikely that their companies and the clients they serve will have the capacity to increase readiness for a sharp change in trading conditions in 2021.

“In light of those things and with very little information from government on when restrictions on key sectors of the economy are likely to be lifted, and the as yet unknown economic damage done to the sector and wider economy, BIFA members are in no position to respond to a second massive shock if there is significant change in the terms of trade with the EU at the end of the year, because the government has stuck to its guns over the transition period.”

“We believe that refusing to even consider extending the transition period is very risky and together with a growing chorus of Brexit commentators, think an extension to the transition period remains likely, and it is really only a question of ‘when’.”